Exam 15: Operational Performance Measurement: Indirect-Cost Variances and Resource- Capacity Management

The following information is available from the Terry Company: What is the total overhead spending variance for the period?

The difference between variable overhead incurred and total standard variable overhead for the output of the period is called the:

The following information is available from the Taro Company: The total overhead flexible-budget (FB)variance for the period is:

The following information is available from the Terry Company: The total overhead flexible-budget (FB)variance for the period is:

The following information is available from the Taro Company: The total under or over applied overhead for the period is:

Megan,Inc.uses the following standard costs per unit for one of its products: Direct labor (2 hrs @ $5/hr)= $10;overhead (2 hrs @ $2.50/hr)= $5.The flexible budget for overhead is $120,000 plus $1 per direct labor hour (DLH).Actual data for the month show total overhead costs of $225,000,total fixed overhead of $123,000,85,000 hours worked,and 40,000 units produced.What is the budgeted denominator activity level in direct labor hours?

Neptune Inc.uses a standard cost system and has the following information for April: The variable factory overhead efficiency variance is:

Air Inc.uses a standard cost system.Overhead cost information for Product CX10 for the month of October is as follows: What is the variable overhead efficiency variance for October?

Factors contributing to the fixed factory overhead spending variance can include all except:

Gerhan Company's flexible budget for the units actually manufactured in May shows $15,640 of total factory overhead;this output level represents 70% of available capacity.During May the company applied overhead to production at the rate of $3.00 per direct labor hour (DLH),based on a denominator volume level of 6,120 DLHs,which represents 90% of available capacity.The company spent 5,000 DLHs and incurred $16,500 of total factory overhead cost during May,including $6,800 for fixed factory overhead. What is the total factory overhead flexible-budget variance for May?

The "death-spiral" effect refers to:

Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010: During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours. The factory overhead spending variance in 2010,based on a three-variance breakdown (decomposition)of the total overhead variance is:

Bluecap Co.uses a standard cost system and flexible budgets for control purposes.The following budgeted information pertains to 2010: During 2010,Bluecap worked 28,000 direct labor hours and manufactured 9,600 units.The actual factory overhead was $14,000 greater than the flexible budget amount for the units produced,of which $6,000 was due to fixed factory overhead.In preparing a budget for 2011 Bluecap decided to raise the level of operation to 90% of capacity,to manufacture 9,000 units at a budgeted total of 27,000 direct labor hours.The variable overhead efficiency variance in 2010 is:

Xero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH),calculated at 90% capacity = 900 standard DLHs.In December,the company operated at 80% of capacity,or 800 standard DLHs.Budgeted factory overhead at 80% of capacity is $3,150,of which $1,350 is fixed overhead.For December,the actual factory overhead cost was $3,800 for 840 actual DLHs,of which $1,300 was for fixed factory overhead.Assuming a four-variance breakdown (decomposition)of the total overhead variance,what is the fixed factory overhead efficiency variance for the period?

Xero Company's standard factory overhead rate is $3.75 per direct labor hour (DLH),calculated at 90% capacity = 900 standard DLHs.In December,the company operated at 80% of capacity,or 800 standard DLHs.Budgeted factory overhead at 80% of capacity is $3,150,of which $1,350 is fixed overhead.For December,the actual factory overhead cost was $3,800 for 840 actual DLHs,of which $1,300 was for fixed factory overhead.Under a three-way breakdown (decomposition)of the total overhead variance,what is the total factory overhead spending variance for December?

When there is a standard batch size for production activity:

Neptune Inc.uses a standard cost system and has the following information for April: The total factory overhead spending variance is:

The following information is available from the Taro Company: What is the variable overhead spending variance for the period?

McAllister Company's master budget for the year just completed was based on 100% capacity and included 40,000 machine hours and $240,000 total factory overhead.The budgeted fixed overhead at 75% of factory capacity would be $160,000 (and 30,000 machine hours).The company actually operated at 90% capacity for the year,and incurred $252,000 total factory overhead. Required: (a)Determine the factory overhead flexible-budget variance for the year.Show calculations.(b)Calculate the factory overhead production-volume variance for the year.Show calculations.

The following information is available from Thinnews Co. ,a company that uses machine hours to apply factory overhead: Under a three-variance breakdown (decomposition)of the total factory overhead variance,the total factory overhead spending variance is: